I first wrote about Jiangyin back in February, and as I promised at that time, my girlfriend and I visited the city and were hosted by the Director of Port Logistics Development, Mr. Xiu. His generosity and the generosity of the people he introduced us to was really amazing and heartwarming. We were treated every step of our way--from being picked up at the bus station, to covering our hotel expense, all food expenses, and a driver available for our movement around Jiangyin and the final 150 km to Shanghai. I cannot thank Mr. Xiu and the people of Jiangyin enough for the great 24 hours spent under their care.

For a relatively smaller city, the layout and development of the city's aesthetics are really impressive. I highly recommend staying at the hotel we experienced, the Jiangyin Life Island Hotel. It is accustomed to catering to foreigners and is adjoined by a Western-style bar in the fashion of an independent brewery-TGIF-live music bar. The beer is labeled HB and very decent.

Being in one of the city's prominent and recently built parks, the feeling of being back in Michigan near the lake is strong--especially with the city's suspension bridge stretching across the Yangtze in the background (see pictures).

The goal of the city is an integrative balance between the development of its logistics facilities at the ports and the atmosphere and environment of the city where its people will spend free time to eat, shop and enjoy life in general. That atmosphere is displayed with the beach area above, extremely popular amongst the public, and the night life displayed below:

There are a number of fairly new buildings with an emphasis on creating an environmentally creative park system. Littered throughout the city, underneath the Yangtze spanning highway and elsewhere, there are a number of beautifully lit and landscaped parks. We were told that the parks are regularly lit and there are no power limitations, despite occasional blackouts in other parts of China.

In terms of the economic development strategy in Jiangyin, almost exactly a year ago an insert was displayed in The China Daily discussing the area's vision and progress. Below is that file in Acrobat format:

Due to its strategic location as the first port located up the Yangtze River from Shanghai and positioned between the financial capital of Shanghai and the manufacturing build-up in Wuxi, Suzhou and Changzhou, Jiangyin is primed for growth. A new port will come online able to process 1 million TEU's and there are many opportunities for infrastructural investment. A view of the new port before it comes online is below:

If anyone reading this post has a specific interest in Jiangyin investment and would like to know more or possibly make some

inquiries with the officials managing the development of city and port infrastructure, please let me know and I would be glad to act as an intermediary in the process. As can be expected, the officials in the city are anxious to attract FDI and positive attention to the city. Although I was personally skeptical prior to my visit, our royal treatment and thorough view of the city convinced me that investment in Jiangyin is at least worth investigating in-depth by logistics firms and manufacturers. (PS. This is not a paid, or in any other way, supported endorsement via Jiangyin officials or any other party).

Next-up: Return to Shanghai!

UPDATE: One of the supplements I wanted to add to this piece on Jiangyin was another piece on Changzhou--mentioned above--that was in Electronic Business May 1. Written by Lauren Gibbons Paul, it provides some great context to what I have written on Jiangyin.

As I always do for reference, below is a map placing Changzhou relative to Nanjing, Jiangyin, Wuxi, Suzhou and Shanghai:

As the Paul article notes, the top electronics manufacturing firms are doing business in Changzhou, with "Flextronics, Fujitsu, GE, Motorola, Philips, Samsung, Texas Instruments implementing R&D and/or manufacturing and sourcing components in the 180,000-acre region, an area designated a free-trade zone by the Chinese government in 1992."

Changzhou, in particular, "is one of 15 Chinese special economic zones created since 1980 to attract foreign enterprises, boost the local economy, create employment and upgrade the industry infrastructure, according to Zhang Xiaoping, director of communications for the Foreign Trade and Economic Bureau of the Changzhou National High-Tech District (CND)."

The article comments on the political-economic balance required:

"These free-trade zones balance the rigors of Communism (under which only the government is allowed to own property, for example) with the attractions of capitalism, says Qin Deng, analyst, AMR Research. Goods flow in and out of the zones much more smoothly than in other parts of the up-and-coming economy. "The customs procedures are much easier to deal with in these zones," says Deng."

This type of customs efficiency is also a focus of Jiangyin, especially as it is a port city able to bypass Shanghai on small- to mid-level direct-to-export sea freight. Its proximity to manufacturing centers such as Changzhou and Wuxi make it an alternative or complementary destination relative to the longer and more expensive Shanghai-bound overland freight distribution.

In the context of China as a whole, "CND is now the top electronics center in China, with both foreign and domestic electronics companies bringing an influx of investment to the region, says Zhu Yangning, director of foreign investment for China CND in Changzhou. For example, Changzhou startup Nanotech Corp. is currently constructing a plant in the CND to manufacture silicon ingots and wafers, PLDs, eFPGA and SuperFlash. Intel Corp. and Silicon Storage Technology Inc. have lent technology support to the project."

On the other hand:

"The import and export of components has long been a headache for electronics companies manufacturing in China. Complex trade and customs regulations often bury these parts in red tape, disrupting a supply chain that often prides itself on just-in-time (JIT) manufacturing practices. Certain requirements in China also can add cost to products--ironic, considering that most manufacturers have gone to China to save money."

Tax incentives are available for exported products:

"Companies assembling products in CND that source components from inside China are eligible for a refund of China's 17 percent value-added tax (VAT), says Deng. "They can get a VAT refund as long as the finished goods ship out of China. If the finished goods stay in China, there is no refund.""

Other incentives include:

"...two years' tax exemption during the company's first two profitable years, half off the regular 15 percent income tax for three years afterward and 10 percent off for another three years if the enterprise is certified as technologically advanced. Other benefits include lower costs (especially in labor) as well as an educational system that includes 13 colleges and scientific research institutions and 700 training centers."

Interestingly in relation to Jiangyin, the article mentions that "CND's national-grade ocean port is a further attraction to these companies, says Yangning, along with easy access to other forms of transportation such as air, road and rail." This is the Changzhou Yangtze Riverside Industrial Park (CYRIP). I am curious just how much this port might cannibalize efforts at Jiangyin's port, but it seems Jiangyin is focused more on trans-shipment whereas Changzhou is focused on manufacturing and materials processing. Time will tell whether these two ports can provide complementary rather than duplicative services.

The article ends by expressing some skepticism:

"In any case, says Deng, the advantages of operating in any special trade zone will decline as China continues to relax its policies overall in order to encourage greater investment. "As the procedures are becoming more transparent and direct, the advantage will diminish," says Deng."